CPS rates won't rise in '13

Updated 11:57 pm, Monday, October 1, 2012

CPS Energy said Monday it won’t raise rates until 2014. Here’s what customers are paying now, and what they would pay starting in early 2014 if a 5 percent increase were to be approved.

CPS Energy said Monday it won’t raise rates until 2014. Here’s what customers are paying now, and what they would pay starting in early 2014 if a 5 percent increase were to be approved.

Photo: Harry Thomas

CPS rates won't rise in '13

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CPS Energy customers won another reprieve from higher utility bills Monday: They won't pay higher rates this year or next year.

CEO Doyle Beneby recommended to the utility's board of trustees that CPS not seek a rate increase for 2013, as it had planned to do.

Beneby said management and operating efficiencies, such as using fewer consulting contracts, planning to shutter CPS' oldest plant and questioning whether positions need to be filled when someone leaves are helping the utility trim costs.

“We're managing more efficiently,” Beneby said. “We're challenging the way we do things.”

CPS plans to ask for a rate increase that would kick in around February 2014. The increase would total 5 percent, but could be rolled out across a two-year period in 2014 and 2015.

A 5 percent increase would cost the average customer living in an 1,800-square-foot home and using about 1,200 kilowatt-hours per month around $5.64 per month.

Another rate increase after that — at 4.75 percent — would happen over 2016 and 2017.

“We won't ask for 1 cent more than we need, nor 1 cent less than we need,” Beneby said.

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This is the second time this year that the utility has deferred a rate increase. It had planned in May to ask the City Council to approve an increase that would have started this fall. But in May, it decided to wait until January to ask for an increase that would have kicked in shortly afterward.

The council must approve all increases for the city-owned utility.

CPS' last rate increase came in February 2010, when it boosted electricity rates by 7.5 percent and natural gas rates by 8.5 percent.

This year, the utility has trimmed 140 positions through attrition and expects to trim an additional 100 next year as employees voluntarily leave the company.

It's also indefinitely deferred a $565 million investment in pollution control technology for its oldest coal plant and plans to shutter that plant 15 years earlier than expected. It bought the Rio Nogales gas plant in Seguin for less than it would have spent on pollution scrubbers for the aging plant and will sell Rio Nogales' excess power on the wholesale market.

The rate increase deferrals won't last forever.

“There may be a day when we're not telling such good news,” said board Chairman Derrick Howard, who asked CPS staff to provide a 10-year projection of rates at the next board meeting.

Beneby said the deferred rate increases are something the utility can handle, and it won't mean an uncomfortably large pop in monthly bills for customers in a few years.

“We're not kicking the can down the road,” Beneby assured trustees.

The rate discussion Monday dealt with electric rates, but the utility also has no plans to increase natural gas rates, CPS spokeswoman Lisa Lewis said.

CPS had not raised rates for 17 years until 2008, when the City Council approved a 3.5 percent rate increase. CPS had requested 5 percent.

The utility has been warning the council that it likely would seek rate increases every other year for a decade, in part to pay for infrastructure upgrades and maintenance for a growing system, as well as an increased commitment to renewable energy. CPS has 728,000 residential and commercial customers.

But for now, the utility is celebrating not having a rate increase immediately.